It is often said that “an S corporation is a corporation that is taxed like a partnership.” This statement is incorrect. An S corporation resembles a partnership only in that it generally does not pay income taxes and its income and losses pass through to the shareholders and retain their character as they pass though. Also, like a partnership, basis adjustments to an S corporation shareholder’s stock reflect allocations of income, expense, loss, and distributions. However, no other rules of subchapter K governing partnership taxation apply to S corporations. Most of the rules governing the relationship between an S corporation and its shareholders differ significantly from the rules governing the relationship between a partnership and its partners. In fact, an S corporation and its shareholders are subject to the rules of subchapter C, just like a corporation that has not made an S election, with very few exceptions. This Article highlights some of the major differences between taxation of S corporations and taxation of partnerships and explores in greater detail the intersection of subchapter C with subchapter S with respect to transactional issues, such as formation of the corporation, redemptions, liquidations, and mergers and acquisitions of and by S corporations, as well as similar issues regarding qualified subchapter S subsidiaries.